Woori Financial Group, one of South Korea’s largest financial groups, will provide crypto custody services. The bank will establish a joint venture with Coinplug, a blockchain-based development company. The group marks the third bank to enter the country’s market after Kookmin Bank and Shinhan Bank.
Woori Financial will develop a joint venture to provide custody services
Woori Financial Group, one of South Korea’s largest banks, will soon provide cryptocurrency custody services. According to the Korea Economic Daily, Woori will form a joint venture with Coinplug, a blockchain solution development company with more than 300 blockchain patents.
Although South Koreans have always been attracted to cryptocurrencies, their regulatory framework prohibits them from relying on exchanges for custody. This has stimulated banks’ interest in strengthening cryptocurrency custody and incorporating it into their services. However, from a legal point of view, banks cannot independently provide these services and need to enter the market through joint ventures.
Despite this, the bank is still in a good position to become the main provider of cryptocurrency custody in the country. Banking institutions are generally trusted in the country, and encryption is an existing industry. An official from Woori stated:
In overseas markets, digital asset custody has become a successful practice in the new services provided by banks.
Banks provide crypto custody as a new source of income
Following Woori’s move, the country’s three major banks now provide crypto custody services. KB Kookmin Bank, the country’s largest banking group, was the first company to enter this field. It established a joint venture Korea Digital Assets Corporation (KODA) with other blockchain-related companies in November 2020.
The second Korean bank to set foot in a new field is Shinhan Bank. Shinhan Bank established a joint venture with Korbit this year to establish its own custody service, called the Korean Digital Asset Custody Company. Custody is more similar to the traditional services provided by banks for fiat currencies. Some people think that this is the reason why banks include this activity. Another relatively stable source of income.
South Korean regulators have taken a strong stance on cryptocurrency and proposed new regulations that may severely affect cryptocurrency transactions in the country. They also banned the police from buying cryptocurrency in May.
What do you think of Woori Financial’s entry into the cryptocurrency custody business? Tell us in the comments section below.
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